A one-night rally on Wall Street, driven primarily by technology companies such as Apple and Amazon, faded amid US economic stimulus and the resurgence of coronavirus caseload in many countries.
Shares fell in Tokyo, Shanghai and Seoul but rose in Sydney. Hong Kong’s market was closed for a thunderstorm.
According to the General Administration of Administration, Chinese state media reported that exports in yuan rose 10.2%, or renminbi, from September a year earlier, while imports rose 4.3%. Dollar-based figures were due later in the day.
After the central bank eliminated the need for cash deposits by central traders to open the way for more negative speculation on the country’s yuan, traders were keeping an eye on the Chinese currency, which may help prevent a rise in value.
The change took effect on Monday and eliminated the requirement imposed in 2018 for a 20% deposit on yuan trades to discourage speculators.
The recovery of the world’s second-largest economy has been a rare bright spot as investors wait to see if the US Congress will manage to provide further funding to Americans and businesses struggling due to the coronovirus epidemic. With the pace of caseloads increasing in the US, Europe and many other countries, there are increasing risks of further disruptions to trade, trade and other daily activities in some regions.
Tokyo’s Nikkei 225 index closed down 0.1% at 23,525.64, while the Shanghai Composite Index rose 0.6% to 3,339.76. South Korea’s Kospi also rose 0.6% to 2,388.96. Shares were mostly lower in Southeast Asia.
Australia’s S&P / ASX 200 climbed 0.9% to 6,188.50 points, led by banks’ shares. Strong Chinese demand is good news for Australian exporters, although unconfirmed reports said Beijing is slowing or halting Australian coal imports, raising concerns over the economic impact of political friction between the two countries.
Wall Street boosted its profit on Monday from last week’s rally, the market’s best in three months. Investors largely saw the latest signs that Democrats and Republicans are no closer to bargaining over more aid to the economy, which is affected by the epidemic.
The S&P 500 rose 1.6% to 3,534.22, with Big Tech shares including Apple and Microsoft leading to much higher gains. Their businesses have proved to be practically impervious to the epidemic compared to most companies, which would benefit from a stronger economy. The S&P 500 is now within 1.4% of its all-time high set September 2.
Investors can bet that Congress will give a more liberal aid bill after the November 3 election should Democrats gain a majority in Congress, as stated in some elections. This could remove potential pulls on corporate profits from Democratic-controlled Washington’s high taxes and strict regulations.
“The market is expressing some comfort with Democrats carrying the White House and Senate, if that means there will be more stimulus,” said Willie Delwich, investment strategist at Baird. “But the reality is several months away before anything has passed.”
The Dow Jones Industrial Average climbed 0.9% to 28,837.52. The Nasdaq Composite, which is heavy with technology shares, rose 2.6% to 11,876.26.
Apple climbed 6.4% and accounted for a quarter of the S&P 500 growth alone. The iPhone maker was also the biggest beneficiary of the index. Amazon grew 4.8%. Both companies have programs coming up this week, with Apple expected to unveil the latest batch of its iPhones on Tuesday, and Amazon holding its Prime Day on Tuesday and Wednesday.
Microsoft also closed higher, rising 2.6%, Facebook’s 4.3% and Google’s parent company reported a 3.6% increase.
The Russell 2000 index of small-cap stocks, which outpaced expectations for the strength of the economy compared to Big Tech companies, rose 0.7% to 1,649.05.
Investors have been agitating for more stimulus since the end of additional unemployment benefits for additional workers and other support for additional workers for the Congress-approved economy earlier this year. Even though Washington may not be providing aid anytime soon, some investors are expecting more help in 2021.
Analysts anticipate the upcoming earnings season to show another quarter of weak profits. According to FactSet, the S&P 500’s earnings are expected to be 20.5% lower than a year ago.
But it’s not as bad as the S&P 500 companies reported for the Spring Quarter, a 31.6% drop. Business activity has gained some momentum since widespread lockdowns across the country were eased.
In energy transactions, US benchmark crude gained 2 cents to $ 39.45 a barrel in electronic trading on the New York Mercant Exchange. It dropped $ 1.17 to $ 39.43 a barrel on Monday.
Brent crude also added 2 cents, with $ 41.74 per barrel.